Civ Pro 2 Final Flashcards
Where do principles of personal jurisdiction apply?
State and federal court
What is the source of law for personal jurisdiction?
14th Amendment
In rem
Jurisdiction is based on property and suit is over property.
Quasi in rem
Suit is not about land, but land formed basis for jurisdiction
In personam
People suing each other over something unrelated to land.
Pennoyer v. Neff
- Facts: Initially, attorney Mitchell sued Neff in Oregon state court for unpaid fees. Neff lived outside of Oregon and could not be found. Notice of the lawsuit was published in a church newspaper. Neff failed to appear, and received default judgment against him. Mitchell got an order for the sheriff to sell Neff’s land, which Mitchell bought and assigned to Pennoyer. Neff sued Pennoyer for eviction in federal court, and the trial court found for Neff, saying the original judgment against Neff was invalid due to personal jurisdiction issues
- Holding: Found in favor of Neff. The property needed to be attached before litigation in order for the court to have jurisdiction over it. Substitute notice via publication (e.g. constructive notice) is not acceptable for in personam cases, as the original case with Mitchell was. Needed actual notice to Neff in order for the original decision to be valid. “Presence” or “consent” to jurisdiction.
Under Pennoyer, how do you achieve jurisdiction?
- D is physically present in state when served
2. D’s property is physically present in state AND attached prior to the suit.
What problems are left unsolved after Pennoyer?
- Intangible property problem (where is something like IP physically present)
- Transient jurisdiction problem
- Fraudulent inducement into forum
What was the basis of the Pennoyer decision?
Common law with a focus on state boundaries.
Hess v. Pawlowski
- Facts: Hess, a resident of PA, was in an accident with Pawloski, MA resident, while driving in MA. A state statute in MA said that a non-resident driving on the roads appointed the state registrar as their agent for personal service simply by driving in the state. Pawloski sued Hess in MA, and served the process on the registrar.
- Holding: A state law may declare that a nonresident motorist impliedly consents to state court jurisdiction and substituted service of process for claims arising from the non residents use of the state’s highways.
- decided under rubric of Pennoyer
What justifies the implied consent to personal jurisdiction in Hess v. Pawlowski?
The extreme dangers of automobiles.
Why do corporations pose a problem under Pennoyer?
It’s difficult to determine physical presence for jurisdiction
International Shoe
- Facts: Int Shoe Co. had 12-13 salesmen in the state of Wash. Int Shoe had no offices there - Delaware corp with headquarters in St. Louis. Salesmen used hotels and public spaces to set up product displays. The state sued Int Shoe for not paying into the state unemployment fund. Personal service on a salesman in the state and service by registered mail were used. Int Shoe made a special appearance at the unemployment office to dispute personal jurisdiction. Decided against them. Wash Superior and Supreme Courts affirmed. Int Shoe appealed to SCOTUS as a 14th Amend due process violation and unconstitutional burden on interstate commerce.
- Holding: Court ruled for the State. Said a corp needs to have “certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” A ‘casual presence’ does not open a corp to suits unrelated to its activities, but “systematic and continuous” activities can. The obligations arose out of Int Shoe’s activities in the state, so it is not unreasonable (corp takes the benefits and protections of the state law, so they can face a lawsuit there too).
What minimum contacts factors are identified in Int’l Shoe?
- Nature and extent of contacts with forum state
- Relationship between contacts and claim
- Inconvenience of traveling to defend
- Liability resulting from privilege of doing business with forum
4 personal jurisdiction scenarios identified in Int’l Shoe
Scenario 1: Personal Jurisdiction Exists
Quality/nature of contacts high
Relationship of contacts to liability high
Scenario 2: No Jurisdiction
Quality/nature of contacts low
Relationship of contacts to liability low
Scenario 3: General Jurisdiction Alternative
Quality/nature of contacts high
Relationship of contacts to liability low
Scenario 4: Sometimes will be enough, sometimes won’t be (Specific Jurisdiction)
Quality/nature of contacts low
Relationship of contacts to liability high
McGee v. International Life Insurance Co.
- Facts: California resident buys life insurance from an Arizona company. Arizona company is taken over by a Texas company. Texas company mails a reinsurance certificate to California where the policy holder lives, and where the premium checks are mailed from. Lawsuit over deinial due to policy holder’s suicide brought in California.
- Holding: Due Process Clause does not prevent a California court from entering a judgment binding the Texas company. California has an interest in protecting its citizens when a company refuses to pay out on insurance. Despite an inconvenience to the Texas company, it is not a denial of due process.
Illinois Model of Long Arm Statute
specific examples of when you can sue nonresidents - “laundry list” (limits Plaintiffs to specific cases)
California Model of Long Arm Statute
exercising jurisdiction over nonresidents on any basis not inconsistent with the Constitution. (Plaintiff-friendly)
Method of Analysis for Long-Arm Statutes
- Long-arm statute says there is personal jurisdiction (IL or CA model)
- Is the exercise of jurisdiction consistent with the Constitution?
What standard must a federal court meet for personal jurisdiction?
Requirements of state where it is located. Use state long-arm statute, then check constitutionality
How might a defendant challenge personal jurisdiction?
- Show up: file 12(b)(2) motion to dismiss
- Refuse to show up and take a default judgment. P has to go to another forum to execute the judgment, and D can challenge PJ for judgment in the new forum.
Hanson v. Denckla
- Facts: PA mother sets up DE trust with DE trustee. Mom retires to FL, where she issues occasional orders to trustee that he follows. After her death, children sued trustee in FL, arguing the trust was invalid because Mom exercised too much control.
- Holding: No, there is no jurisdiction for the Florida court over the Delaware bank. SCOTUS said Florida was not involved with the trust was created and Donner’s move to Florida did not create the jurisdiction. “It is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.”
Gray v. American Radiator
- Facts: Gray sued Titan Valve Co. in Illinois over a water heater that exploded. Titan made a valve in Ohio and sold it to a Pennsylvania company that used it in making a water heater that was sold to the Illinois resident. Titan challenged personal jurisdiction over it in Illinois.
- Holding: Supreme Court of Illinois upheld jurisdiction. Titan enjoys the benefits from the state laws of Illinois with regard to its transactions there. Does not matter if the purchase was made through a middleman, as production of the valve was presumably made in contemplation of use in the state.
- example of IL long-arm statute*
What are the personal jurisdiction factors after McGee/Hanson?
- Nature and extent of defendant’s contacts with the forum state.
- Relationship between defendant’s contacts with the forum and plaintiff’s claim
- Inconvenience to the defendant to travel to the forum?
- Did the defendant “purposefully avail” itself of the privilege of doing business in forum? (enjoy benefits/privileges of forum state)
- Interest of plaintiff in litigating in the forum
- Interest of the forum state
World Wide Volkswagen v. Woodson
- Facts: NY resident purchases an Audi car from a dealer in NY. Traveling to AZ, in a car accident in OK. Brings a products liability claim in OK over a defective gas tank (car rear ended, catches fire) against a number of defendants, including the car dealer and distributor. Dealer and distributor claim no jurisdiction by OK court. District court denied the claim. OK Supreme Court agreed based on a long-arm statute, because clearly good sold by the defendants were used in OK (even though the dealer and distributor had no business at all in OK).
- Holding: Reversed. Reaffirmed minimum contacts rule and also stated that states are co-equal sovereigns and have limits to where their powers can reach. There was no relationship between these defendants and the forum state (and they took no benefits of OK law at all). Foreseeability alone is not a sufficient test under the Due Process Clause, and a unilateral act by one party cannot satisfy the contact requirements. One isolated incident like the accident is not enough.
What does WWVW add to the personal jurisdiction analysis?
Adds foreseeability to the analysis. Foreseeability can be a relevant factor–it must be foreseeable that D will be pulled into court in a state, not that a product will end up there. If they have not reached out and availed themselves of the forum, it is not foreseeable that they will be called to defend a suit.
Calder v. Jones
- Facts: A writer and editor had a story published in the National Enquirer that defamed an actress. Actress sued in California, even though the writer and editor were resident of Florida, worked in Florida, and did not travel to CA for the article research.
- Holding: Upheld jurisdiction in CA court. The defendants wrote an article aimed at the CA activities of a CA resident using CA sources in a magazine with its largest circulation in CA. The defendants should have “reasonably anticipated being haled into court there.” They acted intentionally.
Keeton v. Hustler
- Facts: Plaintiff was a resident of NY and sued Hustler, OH Corp, in NH for defamation. NH was only state where the statute of limitations hadn’t run. Sued for damage to reputation in NH and nationwide.
- Holding: Upheld the personal jurisdiction for NH and nationwide–sales in NH were related to lawsuit. Said NH had an interest in cooperating with all other states for a unitary proceeding in court on the matter. Court only held Hustler was subject to suit in NH on causes of action arising out of the activity being conducted, but not necessarily all possible causes of action.
Walden v. Fiore
- Facts: Professional gamblers were returning from the Caribbean to Nevada. They had a stop in Atlanta where a federal police officer seized cash and wrote a false affidavit about it being from drug activity. The gamblers sued the officer in Nevada court for causing effects in Nevada. 9th Circuit upheld jurisdiction in Nevada.
- Holding: SCOTUS reversed. They said the defendant did not create contacts in Nevada. The plaintiffs were only denied of use of the money in Nevada because they decided to reside there, not because of the officer’s actions. Court said, “our ‘minimum contacts’ analysis looks to the defendant’s contacts with the forum State itself, not the defendant’s contacts with persons who reside there.”
Burger King v. Rudzewicz
- Facts: Rudzewicz and MacShara entered into a franchise agreement with Burger King, a Florida company (HQ in Miami), in 1979 after months of negotiation. Rudzewicz is a Michigan resident. Franchise documents indicate the franchise relationship is established in Florida and Florida laws apply, went to Florida for training. Recession hit, the Burger King store lost business, and Rudzewicz fell behind on his payments to corporate. HQ ends franchise and closes store, but Rudzewicz keeps operating it. Burger King sues in Florida federal district court, which exercises personal jurisdiction through a Florida long arm statute. 11th Circuit reverses, says no personal jurisdiction as it would offend the fundamental fairness of Due Process.
- Holding: Reversed, Florida District Court jurisdiction over Rudzewicz did not violate Due Process. Physical entry into the forum state is not required, although a contract alone is not sufficient minimum contacts in a state. Need to evaluate prior negotiations, terms of the contract, contemplated future consequences, etc. Rudzewicz was an experienced businessman who voluntarily accepted the terms of his business with BK HQ in Miami. Not unreasonable for him to expect to be sued in Florida (and the franchise agreement said Florida law applied; choice of forum clause). Substantial and continuing relationship, fair notice of possible suit in Florida.
What is the final personal jurisdiction analysis (from Burger King)?
- Purposeful minimum contacts
- Nature and extent of contact
- Relationship between contact/claim - did they give rise?
- Purposeful availment
- Foreseeability of being hailed into court. - Other “fair play” factors (use for cases at the margin/close calls)
- Burden on the defendant
- Interest of plaintiff
- Interest of forum and other state
Asahi Metal Industry v. Superior Court
-Facts: Asahi manufactured tire valves in Japan and sold them to Cheng Shin which manufactured tires in Taiwan, and sold them in California. A CA resident is hurt when a valve on a motorcycle tire malfunctions and they crash. Sues Cheng Shin in CA who impleaded Asahi for indemnification.
-Holding: The vote count: Minimum contacts no: 4 Minimum contacts yes: 4 Stevens - “group hug” - says he doesn’t need to decide purposeful availment issue, but agrees on “fair play” factors from Burger King
*Court agrees that there is a burden on the defendants litigating in a foreign legal system.
McIntyre Ltd. v. Nicastro
-Facts: Nicastro injured his hand with a metal shearing tool manufactured by J. McIntyre. The injury occurred in New Jersey. J. McIntyre is a company in England with a US distributor. They never marketed products to the states or shipped products to the states. NJ Supreme Ct. found jurisdiction for NJ courts did not violate due process because the injury occurred in NJ, J. McIntyre knew or should have known its products were distributed nationally, and because McIntyre did not try to stop its products from going to NJ.
-Holding: Reversed, no jurisdiction in NJ. “Due process protects the petitioner’s right to be subject only to lawful authority.” There is no evidence McIntyre acted to avail itself of the benefits or protections of NJ. McIntyre did not target NJ in any specific way, although they did have activities in the US.
Majority of justices conclude:
Limited sales to state that are not purposefully directed there are insufficient to establish minimum contacts
High volume sales to a state through an intermediary, if known to defendant, are sufficient to establish minimum contacts, in absence of other “purposeful” conduct
Secondary factors not in play
- Breyer Concurrence: basically, this is not the case to make a broad rule from, because it does not encompass what are likely all of the modern day considerations we should worry about in commerce.
- Ginsburg Dissent: Targeting the US as a whole is sufficient targeting of every state individually. We cannot allow a big foreign company to use a distributor to avoid jurisdiction.
Shafer v. Heitner
- Facts: Plaintiff (non-resident of DE) is a stockholder of Greyhound (DE corp, AZ is PPB). Suing Greyhound, Greyhound Lines, and 28 current or former officers of the company in a shareholders derivative suit claiming they caused the company to lose money in an antitrust situation. The antitrust activities occurred in OR. Sued in DE and attached stock owned by the officers. Court applied a DE law and placed stock transfer orders to seize the stock. Defendant claims no DP of law, the property cannot be attached in DE, and they have insufficient contacts with DE. Court said sequestration was used not to secure possession of property but to compel an in person appearance of a non-resident. Ct. of Chancery said quasi in rem jurisdiction was fine. DE Supreme Ct. affirmed.
- Holding: Reversed. State courts need to follow International Shoe. Extending Int’l Shoe to in rem too. If there is not direct personal jurisdiction over a person, then how is indirect jurisdiction fair? The stocks are not the subject of the lawsuit and do not make for sufficient contacts with DE for a lawsuit. The defendants did not purposefully avail themselves of the laws of the state.
What is the effect of Shafer v. Heitner on quasi in rem?
Guts quasi in rem, where property seized has nothing to do with the suit
Burnham v. Superior Court
- Facts: A couple living in NJ decided to separate. The wife moved to CA with the kids, and they agreed to file for divorce based on “irreconcilable differences.” Instead, the husband files in NJ state court for “desertion.” The wife files in CA for divorce and child support (support requires in personam jurisdiction). When the husband came to CA for a business trip and to visit the kids, was there for 3 days, and he was served with the papers. CA court upheld jurisdiction because he was served while physically in the state.
- Holding: Supreme Court upheld personal jurisdiction based solely on the fact that the defendant was physically in the state when served with process. Scalia +3: “tag you’re it” = transient jurisdiction is constitutional because it has historically been permitted. It is a continuing tradition of our legal system and meets ‘traditional notions of fair play and substantial justice.’ Brennan +3: without transient jurisdiction the party could have full benefits of being able to sue there as a plaintiff with immunity from being a defendant. And if a defendant has already traveled to the forum state once, it cannot be a huge burden to come back to defend.
What are the takeaways from Shaffer and Burnham about personal jurisdiction?
- Shaffer: Physical presence of property alone is not sufficient - do normal minimum contacts analysis (so where property is related to suit this will be enough, but quasi in rem is not enough)
- Burnham: “tag you’re it” - Physical presence of person is “more or less enough.” Other justices say you have to be in the forum intentionally.
General Jurisdiction
Forum contacts are so omnipresent that it is not a due process problem to hold defendant answerable in the forum for events that did not occur there.
Goodyear v. Brown
- Facts: Two boys from North Carolina killed in a bus accident in France that was allegedly caused by a defective Goodyear tire. Parents sue Goodyear USA and 3 foreign subsidiaries in North Carolina; foreign subsidiaries challenge. NC S. Ct. argues that there is general jurisdiction based on stream of commerce.
- Holding: North Carolina did not have general jurisdiction over Goodyear subsidiaries. General jurisdiction exists where the corporation is “at home” in the forum state.
Where is a corporation “at home” for purposes of general jurisdiction?
- Where it is incorporated
- Where its headquarters (nerve center) is located
Daimler Case
- Example of contraction of general jurisdiction
- Mercedes Benz USA incorporated in DE with principal place of business in NJ may not be subject to general jurisdiction in CA despite a massive sales presence.
Bristol-Myers
- Retracts expansive specific jurisdiction
- Plaintiffs from multiple states (including CA) sue in class action in CA for injuries.
- Holding: CA courts lack PJ over D for injuries that arose outside CA, even though the injuries sustained by CA and non-CA plaintiffs were the same
Ford Case
- Facts: Ford vehicles were involved in accidents in Montana and Minnesota, and Ford is sued in both states. Ford is headquartered in Michigan and incorporated in Delaware. In both states, Ford has many dealerships and repair shops, but the vehicles involved in the crashes were not sold in forum states. No general jurisdiction in either forum state because Ford is not “at home.”
- Holding: Ford is subject to personal jurisdiction in this case because Ford’s activities in the forum states influenced the plaintiffs to buy the used cars. There is no causal relationship, but there is a relationship that is meaningfully related to the injury/suit.
Specific Jurisdiction
Contacts with the forum clearly give rise to the lawsuit
Insurance Corp. of Ireland
- Facts: Compagnie was a DE corp. owned by a PA company and the Republic of Guinea. They sued a foreign insurance company when the insurance company died to pay coverage. Sued in PA district court. Insurance Corp. of Ireland challenges for lack of jurisdiction in the answer and moved for SJ. DC wanted to enter discovery to evaluate the PJ issue. Insurance corp. refused to comply with discovery orders. DC sanctioned Insurance by finding that it had PJ
- Holding: A defendant may waive its PJ defense by entering an appearance and failing to comply with rules requiring it to lodge a timely objection, and entering an appearance, raising the objection, and failing to comply with applicable discovery rules, the violation of which include waiver as an available sanction
Carnival Cruise Lines v. Shute
- Facts: Washington plaintiffs bought cruise tickets which contained fine prints saying you must sue in FL. Leave from CA to MX and plaintiff tripped and is injured and sues in WA. Carnival made two arguments. Not only is the forum selection clause valid, but also no PJ in WA. Carnival contacts in WA: sell tickets there, contacts did not directly lead to injury, but there is a relationship.
- Holding: Forum selection clauses are presumptively valid, but subject to scrutiny for issues concerning fundamental fairness. Plaintiffs had the option of rejecting the contract by not going on trip. Not fundamentally unfair, Florida is a logical, sensible forum.
Personal jurisdiction/consent mechanisms
- Federal Court: Failing to raise a timely 12(b)(2) defense = waiver (FRCP 12(g)) and 12(h))
- Many State Courts: entering a “general” versus “specific” appearance = waiver
- Litigating PJ in a forum = consent to the jurisdiction of that court to resolve PJ (Bank of Ireland)
- Forum selection clause = consent to the PJ of the forum selected
Riley v. Money Mutual
- Facts: MoneyMutual is a nationwide company that gets a finder’s fee for matching people. Sued via class action by people who received loans in MN, alleging that MM was in violation of state laws.
- Holding: Applying minimum contacts, there is personal jurisdiction over MoneyMutual in Minnesota. Emails count toward minimum contacts if the defendant knew where the email was going–here, MoneyMutual knew the loan applicants were in MN when they reached out. Also considers national television advertising (not specifically targeted at MN residents) and Google Adwords (relevant contact).
Zippo sliding scale
- Defendant clearly does business over the internet: jurisdiction
- Interactive websites where a user can exchange information: maybe jurisdiction
- Defendant has simply posted information on an internet web site: no jurisdiction
Some states apply Zippo and others apply Riley, which is on the transactional part of the scale
What is service of process?
How you notify someone of a suit
What are the dimensions of service?
- Constitutional (14th amendment)
- Rule
What are the 3 ways to serve someone in federal court?
Rule 4(e) service on individuals in US
- Follow rules of state where court is located
- Follow rules of state where person served is located
- Serve personally at home
Mullane v. Central Hanover Bank & Trust Co.
- Facts: New York State banking law allowed small trusts to pool assets into a larger common fund with a single manager. This promoted economies of scale and risk management for smaller trusts that otherwise could not afford corporate fiduciaries. Central Hanover asked the NY court for a settlement of the common trust; it had 113 trusts participating and $3 million. The statute only required publication in the paper for 4 weeks. Central Hanover had also sent letters to everyone when the fund started.
- Holding: Reversed. Notice has to be “reasonably calculated” to inform known parties that are affected by the proceeding. The statute is unconstitutional for notice. That said, notice by publication is acceptable for unknown parties, parties who could not be found through due diligence, and any party whose future interest was not known with certainty.
- Takeaway: Even state service rules should be run through the Mullane test.
What FRCP covers service?
Rule 4
Under Rule 4(c), who can serve a complaint?
Any person who is (1) NOT a party and (2) over 18 years of age
What is venue?
Geographic location where the suit will be litigated
What must you have for a forum to be appropriate?
Personal jurisdiction, venue, and subject matter jurisdiction (you may have more than one appropriate forum, then you choose based on strategy/convenience)
Under 28 USC 1391, when is venue proper?
- In a district “where any defendant resides, if all defendants are residents of the same state;” or
- In a district “where a substantial part of the events or omissions giving rise to the claim occurred;” or
- A judicial district in which any defendant is subject to PJ at the time the action commenced, IF there is not district in which the action may otherwise be brought.
What is the residence for a natural person under 28 USC 1391?
Where they are domiciled (state of which they are a citizen)
What is the residence of a corporation under 28 USC 1391?
Where they are subject to a court’s personal jurisdiction
so where they are at home or wherever specific jurisdiction applies
Earthdweller v. Rothenagel
- Facts: Catherine and Michael Rogers developed a concept for a business that marketed environmentally sound products. The business was incorporated and has principal place of business in Illinois. Rothenagel was hired as a business consultant, and began expanding the business in MN. The Rogers claim that Rothenagel misappropriated confidential information and trade secrets. They filed the case in Illinois and Rothenagel challenged venue under § 1391(a).
- Holding: Venue was proper in Illinois, no net gain in transferring venue to Minnesota.
- Takeaway: Under § 1404, must show net benefit to convenience overall, with deference to plaintiff’s choice. Burden on movant (usually D) to show net gain to convenience. Under 1404(a), will look at convenience of parties, convenience of witnesses, and the interests of justice (a multi-factored analysis focusing on the administration of the court system - possibility of jury view, access to sources of proof, public interest, familiarity with applicable law, and dockets)
What is forum non conveniens?
A doctrine permitting a court to dismiss a case over which it has jurisdiction if an alternate jurisdiction is more convenient for hearing the matter.
How does venue differ from forum non conveniens?
- Venue is from a statute, forum non conveniens is from common law
- Venue is designed to promote convenience, but forum non is a booster/supplement to convenience
When will forum non conveniens most likely be needed?
- Federal court: When events leading to suit did not occur in the US (see Piper)
- State court: More common here, when case is filed in one state court but logically another state would be the better forum
What are the factors considered in a forum non conveniens analysis?
Private Interest Factors:
- Access to proof/premises
- Availability of witnesses
- Other factors that make trial easy/inexpensive
Public Interest Factors:
- Court Congestion
- Local interest in suit
- Competence over applicable law
- Avoiding conflict of laws
- Burden to local jurors
Piper Aircraft v. Reyno
- Facts: Pretty complicated, but essentially there was a plane crash in Scotland and the case ended up in PA district court because the US had more favorable product liability laws.
- Holding: Forum non conveniens applies. The American interest in this case is not strong enough to burden the US legal system with such a complicated case. The alternate forum in Scotland is clearly adequate, we give less weight to the forum choice of foreign plaintiffs, Scotland has strong interest in trying case because all of the injured parties were Scottish and the accident occurred there.
Strawbridge
For cases in federal court on diversity, there must be complete diversity among parties (no plaintiff and defendant can be from the same state)
Mas v. Perry
- Facts: Mr. and Mrs. Mas were graduate students from Louisiana State, he was a French national and she was from Mississippi. The landlord, Perry, watched them through a two-way mirror. They filed suit in Louisiana in federal court. Perry challenged, saying they were not diverse from him.
- Holding: There was diversity jurisdiction because neither Mr. Mas nor Mrs. Mas were domiciled in Louisiana.
For purposes of diversity jurisdiction, where is someone domiciled?
Where they take up residence with the intent to remain indefinitely
